UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
Commission File Number 0-22572
OM GROUP, INC.
(exact name of registrant as specified in its charter)
Delaware 52-1736882
(state or other jurisdiction of (I.R.S., Employer
incorporation or organization) Identification Number)
Tower City
50 Public Square
3500 Terminal Tower
Cleveland, Ohio 44113-2204
(Address of principal executive offices)
(zip code)
(216) 781-0083
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _____X_____ No __________
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of March 31, 1999: Common Stock, $.01 Par Value - 23,703,219
shares.
<PAGE>
INDEX
OM GROUP, INC.
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- March 31, 1999 and December
31, 1998
Condensed consolidated statements of income -- Three months ended
March 31, 1999 and 1998
Condensed consolidated statements of cash flows -- Three months
ended March 31, 1999 and 1998
Notes to condensed consolidated financial statements -- March 31,
1999
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Part II. Other Information
Item 1. Legal Proceedings - Not applicable
Item 2. Changes in Securities - Not applicable
Item 3. Defaults upon Senior Securities - Not applicable
Item 4. Submission of Matters to a Vote of Security Holders - Not applicable
Item 5. Other information - Not applicable
Item 6. Exhibits and Reports on Form 8-K
(15) Independent Accountants' Review Report
(15) Letter re: Unaudited Interim Financial Information
(27) Financial Data Schedule
Page 1
<PAGE>
Part I Financial Information
Item 1 Financial Statements
OM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of dollars, except share data)
(Unaudited)
March 31, December 31,
1999 1998
--------- ---------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 9,824 $ 7,750
Accounts receivable 84,636 80,906
Inventories 332,106 283,264
Other current assets 29,187 48,321
-------- --------
Total Current Assets 455,753 420,241
PROPERTY, PLANT AND EQUIPMENT
Land 4,316 4,241
Buildings and improvements 80,882 80,148
Machinery and equipment 259,302 242,137
Furniture and fixtures 12,326 12,242
-------- --------
356,826 338,768
Less accumulated depreciation 97,974 93,423
-------- --------
258,852 245,345
OTHER ASSETS
Goodwill and other intangible assets 187,176 188,486
Other assets 20,059 16,647
-------- --------
TOTAL ASSETS $921,840 $870,719
======== ========
Page 2
<PAGE>
Part I Financial Information
Item 1 Financial Statements
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 122 $ 141
Short-term debt 2,000
Accounts payable 66,913 76,412
Other accrued expenses 41,435 41,014
-------- --------
Total Current Liabilities 108,470 119,567
LONG-TERM LIABILITIES
Long-term debt 366,185 309,964
Deferred income taxes 26,478 29,950
Other long-term liabilities 7,492 7,095
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value:
Authorized 2,000,000 shares; no shares
issued or outstanding
Common stock, $0.01 par value:
Authorized 60,000,000 shares;
issued 23,959,346 shares 240 240
Capital in excess of par value 258,085 258,085
Retained earnings 165,448 155,691
Treasury stock (256,127 shares in 1999
and 234,847 shares in 1998, at cost) (8,910) (8,494)
Accumulated other comprehensive income (1,648) (1,379)
-------- --------
Total Stockholders' Equity 413,215 404,143
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $921,840 $870,719
======== ========
See notes to condensed Consolidated Financial Statements
Page 3
<PAGE>
Part I Financial Information
Item 1 Financial Statements
OM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Thousands of dollars, except per share data)
(Unaudited)
Three Months Ended
March 31,
---------------------
1999 1998
-------- ---------
Net sales $114,113 $138,098
Cost of products sold 77,004 103,468
------- --------
37,109 34,630
Selling, general and administrative expenses 14,306 14,097
------- --------
INCOME FROM OPERATIONS 22,803 20,533
OTHER INCOME (EXPENSE)
Interest expense (4,450) (3,979)
Interest income 15 108
Foreign exchange gain 400 178
-------- --------
(4,035) (3,693)
-------- --------
INCOME BEFORE INCOME TAXES 18,768 16,840
Income taxes 5,795 5,671
-------- --------
NET INCOME $ 12,973 $ 11,169
======== ========
Net income per common share $0.55 $0.51
Net income per common share -
assuming dilution $0.54 $0.49
Dividends paid per common share $0.10 $0.09
See notes to condensed Consolidated Financial Statements
Page 4
<PAGE>
Part I Financial Information
Item 1 Financial Statements
OM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
Three Months Ended
March 31,
-------------------
1999 1998
-------- --------
OPERATING ACTIVITIES
Net income $12,973 $11,169
Items not affecting cash:
Depreciation and amortization 6,881 6,517
Foreign exchange gain (400) (178)
Deferred income taxes (3,472) (1,226)
Changes in operating assets and liabilities (43,927) (22,221)
------- -------
NET CASH USED IN OPERATING ACTIVITIES (27,945) (5,939)
INVESTING ACTIVITIES
Expenditures for property, plant and equipment, net (17,275) (16,385)
Acquisitions of businesses (2,650) (94,043)
------- ---------
NET CASH USED IN INVESTING ACTIVITIES (19,925) (110,428)
FINANCING ACTIVITIES
Dividend payments (2,375) (1,986)
Long-term borrowings 56,221 114,000
Payments of long-term debt (66)
Payments of short-term debt (2,000)
Purchase of treasury stock (1,864) (950)
Proceeds from exercise of stock options 189 111
------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 50,171 111,109
Effect of exchange rate changes on cash and
cash equivalents (227) 165
------- -------
Increase (decrease) in cash and cash equivalents 2,074 (5,093)
Cash and cash equivalents at beginning of period 7,750 13,193
------- -------
Cash and cash equivalents at end of period $ 9,824 $ 8,100
======= =======
See notes to condensed Consolidated Financial Statements
Page 5
<PAGE>
Part I Financial Information
Item 1 Financial Statements
OM GROUP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 1999
(Thousands of dollars, except per share amounts)
Note A BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair financial
presentation have been included. Past operating results are not
necessarily indicative of the results which may occur in future
periods. For further information refer to the consolidated financial
statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1998.
In June, 1998, SFAS No. 133 "Accounting for Derivative Instruments
and Hedging Activities" was issued. SFAS No. 133 provides a
comprehensive and consistent standard for the recognition and
measurement of derivatives and hedging activities. The Company must
adopt SFAS No. 133 no later than the first quarter of fiscal year
2000; adoption of this statement is not expected to have a material
effect on earnings or the financial position of the Company.
Note B INVENTORIES
Inventories consist of the following:
March 31, December 31,
1999 1998
-------- ---------
Raw materials and supplies $138,631 $ 99,471
Finished goods 128,663 123,651
-------- --------
267,294 223,122
LIFO reserve 64,812 60,142
-------- --------
Total inventories $332,106 $283,264
======== ========
Page 6
<PAGE>
Part I Financial Information
Item 1 Financial Statements
Note C CONTINGENT MATTERS
The Company is a party to various legal proceedings incidental to its
business and is subject to a variety of environmental and pollution
control laws and regulations in the jurisdictions in which it
operates. As is the case with other companies in similar industries,
the Company faces exposure from actual or potential claims and legal
proceedings involving environmental matters. Although it is very
difficult to quantify the potential impact of compliance with or
liability under environmental protection laws, management believes
that the ultimate aggregate cost to the Company of environmental
remediation, as well as other legal proceedings arising out of
operations in the normal course of business, will not result in a
material adverse effect upon its financial condition or results of
operations.
Note D COMPUTATION OF EARNINGS PER SHARE
The following table sets forth the computation of net income per
common share and net income per common share - assuming dilution
(shares in thousands):
Three Months Ended
March 31
------------------
1999 1998
------- -------
Net income $12,973 $11,169
======= =======
Weighted average number of shares outstanding 23,703 22,064
Dilutive effect of stock options 541 756
------- -------
Weighted average number of shares outstanding -
assuming dilution 24,244 22,820
====== ======
Net income per common share $.55 $.51
==== ====
Net income per common share -
assuming dilution $.54 $.49
==== ====
Page 7
<PAGE>
Part I Financial Information
Item 1 Financial Statements
Note E COMPREHENSIVE INCOME
The principal differences between net income as reported in the
condensed consolidated statements of income and comprehensive income
are foreign currency translation adjustments recorded in
stockholders' equity. Comprehensive income for the three months
ended March 31, 1999 and 1998 was $12,704 and $11,329, respectively,
and did not differ materially from net income.
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Three Months Ended March 31, 1999 Compared to Three Months Ended
March 31, 1998
Net sales for the three months ended March 31, 1999 were $114.1
million, a decrease of 17.4% compared to the same period for 1998.
The decrease in sales resulted principally from lower cobalt, nickel,
and copper raw material prices.
The following table summarizes market price fluctuations on the
primary raw materials used by the Company in manufacturing its
products:
Market Price Ranges per Pound
Three Months Ended March 31,
------------------------------------
1999 1998
--------------- ----------------
Cobalt - 99.3% Grade $6.70 to $17.43 $18.10 to $20.25
Nickel $1.81 to $ 2.33 $ 2.37 to $ 2.69
Copper $0.61 to $ 0.66 $ 0.74 to $ 0.82
The following table sets forth the pounds of carboxylates, salts and
powders sold during each period:
Three Months Ended March 31,
--------------------------- Percentage
(in millions of pounds) 1999 1998 Change
---- ---- -------
Carboxylates 17.5 14.4 21.5%
Salts 23.9 21.7 10.1%
Powders 10.3 10.8 (4.6)%
---- ---- -----
51.7 46.9 10.2%
==== ==== =====
Page 8
<PAGE>
Part I Financial Information
Item 2 Financial Statements
The increase in physical volume of carboxylate products sold was
primarily due to increased sales of PVC additives and generally
stronger catalyst and drier sales in the United States. The increase
in physical volume of salt products reflects higher sales of memory
disk chemicals in Asia Pacific, more than offsetting a decline in
organic salt volumes related to the transition involved with
establishing a new Japanese sales office and the termination of the
D&O (Japan) joint venture. The decrease in physical volume of
powders sold was due to softness in copper powder products sold to
the relatively weak oilfield and agricultural equipment business
areas, partially offset by substantial increases in extra fine cobalt
sales to the hard metal tool and diamond tool industries.
Gross profit increased to $37.1 million for the three month period
ended March 31, 1999, a 7.2% increase over the same period in 1998.
The improvement in gross profit was primarily the result of a
combination of increased volumes, improved product mix and lower
expenses, which offset a short-term compression in the Company's raw
material margin. This compression occurs in the short-term when the
cobalt market price rises dramatically, with a resulting short-term
selling price lag. Cost of products sold decreased to 67.5% for the
three months ended March 31, 1999 from 74.9% of net sales during the
same period of 1998 as a result of lower cobalt, nickel and copper
pricing and improved product mix.
Selling, general and administrative expenses increased by $.2 million
in the three month period ended March 31, 1999 from the same period
in 1998 resulting from general increases in administrative costs due
to the Company's growth. However, due to the decline in net sales
resulting from lower cobalt, nickel, and copper prices, selling,
general and administrative expenses increased to 12.5% of net sales
for the first three months of 1999 compared to 10.2% of net sales for
the same period in 1998.
Other expense - net in 1999 was $4.0 million compared to $3.7
million in 1998, due primarily to increased interest expense on
higher outstanding borrowings as a result of provisional payments
made on Zambia Consolidated Copper Mines Limited cobalt-copper
concentrate.
Income taxes as a percentage of income before income taxes decreased
to 30.9% for the first quarter of 1999 from 33.7% in the same period
in 1998. The lower effective tax rate is due primarily to higher
income from the relatively low statutory rate in Finland and the tax
holiday in Malaysia.
Net income for the three month period ended March 31, 1999 was $13.0
million, an increase of $1.8 million from the same period in 1998,
due to the aforementioned factors.
Page 9
<PAGE>
Part I Financial Information
Item 2 Financial Statements
Liquidity and Capital Resources
During the three month period ended March 31, 1999, the Company's net
working capital increased by approximately $47 million, compared to
December 31,1998. This increase was primarily the result of
provisional payments made on Zambia Consolidated Copper Mines Limited
cobalt-copper concentrate which were funded primarily through
additional bank borrowings. Capital expenditures increased in 1999,
primarily due to the completion of the Company's solvent extraction
unit in Kokkola, Finland and the continuing smelter construction
project in Lumbumbashi, Democratic Republic of Congo. These capital
expenditures were funded through cash generated by operations as well
as additional borrowings under the Company's revolving credit
facility.
In January, 1999, the Company's revolving credit facility was revised
to increase available credit to $325 million to finance the purchase
of cobalt-copper concentrate, and to expand its sources of capital by
adding three new institutions.
The Company believes that it will have sufficient cash generated by
operations and through its credit facilities to provide for its
future working capital and capital expenditure requirements and to
pay quarterly dividends on its common stock, subject to the Board's
discretion. Subject to several limitations in its credit facilities,
the Company may incur additional borrowings under this line to
finance working capital and certain capital expenditures, including,
without limitation, the purchase of additional raw materials.
Year 2000
Based on ongoing reviews of the Company's systems, the Company
presently believes that with modifications to existing computer
software and conversions to new software, the Year 2000 Issue will
not pose significant operational problems to its normal business
activities.
The Company's plan to resolve the Year 2000 Issue involves the
following four phases: assessment, remediation, testing and
implementation. The following table summarizes the Company's
progress on these Year 2000 phases, with respect to: 1) the nature
and potential effects of the Year 2000 on information (IT) and non-IT
systems; 2) the status of the Company's progress in becoming Year
2000 ready for both IT and non-IT systems, including estimated
timetable for completion of each phase; and 3) third parties and
their exposure to the Year 2000.
Page 10
<PAGE>
Part I Financial Information
Item 2 Financial Statements
Exposure Type Resolution Phases
---------------------- -----------------------------------------
Assess Remedi- Imple-
-ment ation Testing mentation
-------- -------- -------- ---------
INFORMATION SYSTEMS
------------------------
% Complete at 3/31/99 90% 80% 75% 70%
Expected Completion Date Apr 1999 Jun 1999 Jul 1999 Sep 1999
NON-INFORMATION SYSTEMS
------------------------
Production and
Manufacturing Systems
% Complete at 3/31/99 100% 90% 75% 60%
Expected Completion Date Sep 1998 Jun 1999 Jul 1999 Sep 1999
Products
% Complete at 3/31/99 100% N/A N/A N/A
Expected Completion Date Sep 1998
THIRD PARTIES
------------------------
System Interface
% Complete at 3/31/99 95% N/A N/A N/A
Expected Completion Date Apr 1999
Other Material Exposures
% Complete at 3/31/99 100% N/A N/A N/A
Expected Completion Date Sep 1998
This project will be completed using a combination of existing
internal and external resources. The total cost of the Year 2000
project is estimated at $2.5 million and is being funded through
operating cash flows. As of March 31, 1999, approximately $1.4
million has been incurred. Of the total project cost, approximately
$.8 million is attributable to a new software purchase, which has
been capitalized. The remaining $1.7 million, which is being
expensed as incurred, is not expected to have a material effect on
the results of operations of the Company.
Management of the Company believes it has an effective program in
place to resolve the Year 2000 issue in a timely manner. As noted
above, the Company has not yet completed all necessary phases of the
Year 2000 program. Disruptions in the economy generally resulting
from Year 2000 issues could also materially adversely affect the
Company. The amount of potential liability and lost revenue cannot
be reasonably estimated at this time.
Page 11
<PAGE>
Part I Financial Information
Item 2 Financial Statements
The Company does not believe that lack of completion of all phases of
the Year 2000 program by December 31, 1999 would materially disrupt
its operations, based on an evaluation of the status of the program
in April, 1999, and has determined that a contingency plan is not
necessary.
Euro Conversion
The Company has converted and/or installed the necessary software
modifications and is successfully operating in the post-euro
conversion European economy since the introduction of the euro
currency on January 1, 1999.
Forward Looking Statements
The Company is making this statement in order to satisfy the "safe
harbor" provisions contained in the Private Securities Litigation
Reform Act of 1995. The foregoing discussion includes forward-
looking statements relating to the business of the Company. Such
forward-looking statements are subject to uncertainties and factors
relating to the Company's operations and business environment, all of
which are difficult to predict and many of which are beyond the
control of the Company, that could cause actual results of the
Company to differ materially from those matters expressed in or
implied by such forward-looking statements. The Company believes
that the following factors, among others, could affect its future
performance and cause actual results of the Company to differ
materially from those expressed in or implied by forward-looking
statements made by or on behalf of the Company: (a) the price and
supply of raw materials, particularly cobalt, copper and nickel; (b)
demand for metal-based specialty chemicals in the mature markets in
the United States and Europe; (c) demand for metal-based specialty
chemicals in Asia-Pacific and other less mature markets; (d) the
effect of non-currency risks of investing in and conducting
operations in foreign countries, together with fluctuations in
currency exchange rates upon the Company's international operations,
including those relating to political, social, economic and
regulatory factors; and (e) the Company's ability and its customers'
and suppliers' ability to replace, modify or upgrade computer
programs in ways that adequately address the Year 2000 Issue.
Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A discussion of market risk exposures is included in Part II, Item
7a, "Qualitative and Quantitative Disclosure About Market Risk", of
the Company's 1998 Annual Report on Form 10-K. There have been no
material changes during the three months ended March 31, 1999.
Page 12
<PAGE>
Part I Financial Information
Part II OTHER INFORMATION
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are included herein:
Exhibit (15) Independent Accountants' Review Report
Exhibit (15) Letter re: Unaudited Interim Financial Information
Exhibit (27) Financial Data Schedule
There were no reports on Form 8-K filed during the three months ended
March 31, 1999.
Page 13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 7, 1999 OM GROUP, INC.
/s/ James M. Materna
------------------------------
James M. Materna
Chief Financial Officer
(Duly authorized signatory of OM Group, Inc.)
Page 14
<PAGE>
Independent Accountants' Review Report
Stockholders and Board of Directors
OM Group, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of OM
Group, Inc. as of March 31, 1999, and the related condensed consolidated
statements of income and cash flows for the three-month periods ended March 31,
1999 and 1998. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of OM Group, Inc. as of December 31,
1998, and the related consolidated statements of income, stockholders' equity,
and cash flows for the year then ended, not presented herein, and in our report
dated February 12, 1999, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 1998,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Cleveland, Ohio
May 6, 1999
Page 15
<PAGE>
Acknowledgment of Independent Accountants
Stockholders and Board of Directors
OM Group, Inc.
We are aware of the incorporation by reference in the following Registration
Statements of OM Group, Inc. of our report dated May 6, 1999, relating to the
unaudited condensed consolidated interim financial statements of OM Group, Inc.
which are included in its Form 10-Q for the quarter ended March 31, 1999.
Registration
Number Description Filing Date
33-74674 OM Group, Inc. Long-Term Incentive Compensation
Plan - Form S-8 Registration Statement -
1,015,625 Shares January 27, 1994
333-7529 OMG Americas, Inc. Employees' Profit Sharing
Plan -- Form S-8 Registration Statement -
250,000 Shares July 3, 1996
333-7531 OM Group, Inc. Non-Employee Directors' Equity
Plan -- Form S-8 Registration Statement -
250,000 Shares July 3, 1996
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part
of the registration statements prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Cleveland, Ohio
May 6, 1999
Page 16
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
This schedule contains summary financial information extracted from the OM
Group, Inc. Condensed Consolidated Balance Sheet at March 31, 1999 (Unaudited)
and the OM Group, Inc. Condensed Consolidated Statement of Income for the three
months ended March 31, 1999 (Unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER>1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 9,824
<SECURITIES> 0
<RECEIVABLES> 84,636
<ALLOWANCES> 0
<INVENTORY> 332,106
<CURRENT-ASSETS> 455,753
<PP&E> 356,826
<DEPRECIATION> 97,974
<TOTAL-ASSETS> 921,840
<CURRENT-LIABILITIES> 108,470
<BONDS> 0
0
0
<COMMON> 240
<OTHER-SE> 412,975
<TOTAL-LIABILITY-AND-EQUITY> 921,840
<SALES> 114,113
<TOTAL-REVENUES> 114,113
<CGS> 77,004
<TOTAL-COSTS> 91,310
<OTHER-EXPENSES> (415)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,450
<INCOME-PRETAX> 18,768
<INCOME-TAX> 5,795
<INCOME-CONTINUING> 12,973
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,973
<EPS-PRIMARY> .55
<EPS-DILUTED> .54
